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without authority, be a valid contract in the hands of any holder as against any person whose signature was placed thereon before delivery.

$16. DELIVERY; WHEN EFFECTUAL; WHEN PRESUMED.-Every contract on a negotiable instrument is incomplete and revocable until delivery of the instrument for the purpose of giving effect thereto. As between immediate parties and as regards a remote party other than a holder in due course the delivery in order to be effectual must be made either by or under the authority of the party making, drawing, accepting, or indorsing as the case may be, and in such case the delivery may be shown to have been conditional or for a special purpose only and not for the purpose of transferring the property in the instrument. But where the instrument is in the hands of a holder in due course a valid delivery thereof by all parties prior to him so as to make them liable to him is conclusively presumed. And where the instrument is no longer in the possession of a party whose signature appears thereon a valid and intentional delivery by him is presumed until the contrary is proved.

$ 17. CONSTRUCTION WHERE INSTRUMENT IS AMBIGUOUS.-Where the language of the instrument is ambiguous or there are omissions therein the following rules of construction apply:

1. Where the sum payable is expressed in words and also in figures and there is a discrepancy between the two the sum denoted by the words is the sum payable; but if the words are ambiguous or uncertain references may be had to the figures to fix the amount.

2. Where the instrument provides for the payment of interest without specifying the date from which interest is to run the interest runs from the date of the instrument, and if the instrument is undated from the issue thereof.

3. Where the instrument is not dated it will be considered to be dated as of the time it was issued.

4. Where there is a conflict between the written and printed provisions of the instrument the written provisions prevail.

5. Where the instrument is so ambiguous that there is doubt whether it is a bill or note the holder may treat it as either at his election.

6. Where a signature is so placed upon the instrument that it is not clear in what capacity the person making the same intended to sign he is to be deemed an indorser.

7. Where an instrument containing the words "I promise to pay " is signed by two or more persons they are deemed to be jointly and severally liable thereon.

$18. LIABILITY OF PERSON SIGNING IN TRADE OR ASSUMED NAME.-No person is liable on the instrument whose signature does not appear thereon except as herein otherwise expressly provided. But one who signs in a trade or assumed name will be liable to the same extent as if he had signed in his own name.

$19. SIGNATURE BY AGENT; AUTHORITY; HOW SHOWN.-The signature of any party may be made by a duly authorized agent. No particular form of appointment is necessary for this purpose, and the authority of the agent may be established as in other cases of agency.

$20. LIABILITY OF PERSON SIGNING AS AGENT, &C.-Where the instrument contains or a person adds to his signature words indicating that he signs for or on behalf of a principal or in a representative capacity without disclosing his principal he is not liable on the instrument if he was duly authorized, but the mere addition of words describing him as an agent

or as filling a representative character without disclosing his principal does not exempt him from personal liability.

$21. SIGNATURE BY PROCURATION; EFFECT OF.-A signature by "procuration" operates as notice that the agent has but a limited authority to sign, and the principal is bound only in case the agent in so signing acted within the actual limits of his authority.

§ 22. EFFECT OF INDORSEMENT BY INFANT OR CORPORATION.-The indorsement or assignment of the instrument by a corporation or by an infant passes the property therein notwithstanding that from want of capacity the corporation or infant may incur no liability thereon.

23. FORGED SIGNATURE; EFFECT OF.-Where a signature is forged or made without the authority of the person whose signature it purports to be it is wholly inoperative, and no right to retain the instrument or to give a discharge therefor or to enforce payment thereof against any party thereto can be acquired through or under such signature unless the party against whom it is sought to enforce such right is precluded from setting up the forgery or want of authority.

ARTICLE II.

CONSIDERATION.

24. PRESUMPTION OF CONSIDERATION.-Every negotiable instrument is deemed prima facie to have been issued for a valuable consideration and every person whose signature appears thereon to have become a party

thereto for value.

25. WHAT CONSTITUTES CONSIDERATION.-Value is any consideration sufficient to support a simple contract. An antecedent or pre-existing debt constitutes value, and is deemed such whether the instrument is payable on demand or at a future time.

26. WHAT CONSTITUTES HOLDER FOR VALUE. -Where value has at any time been given for the instrument the holder is deemed a holder for value in respect to all parties who became such prior to that time.

$27. WHEN LIEN ON INSTRUMENT CONSTITUTES HOLDER FOR VALUE.—— Where the holder has a lien on the instrument arising either from contract or by implication of law he is deemed a holder for value to the extent of his lien.

$28. EFFECT OF WANT OF CONSIDERATION.-Absence or failure of consideration is matter of defence as against any person not a holder in due course, and partial failure of consideration is a defence pro tanto, whether the failure is an ascertained and liquidated amount or otherwise.

$29. LIABILITY OF ACCOMMODATION INDORSER.—An accommodation party is one who has signed the instrument as maker, drawer, acceptor, or indorser without receiving value there for and for the purpose of lending his name to some other person. Such a person is liable on the instrument to a holder for value notwithstanding such holder at the time of taking the instrument knew him to be only an accommodation party.

ARTICLE III.

NEGOTIATION.

$30. WHAT CONSTITUTES NEGOTIATION.-An instrument is negotiated when it is transferred from one person to another in such manner as to constitute the transferee the holder thereof. If payable to bearer it is negotiated by delivery; if payable to order it is negotiated by the indorsement of the holder completed by delivery.

31. INDORSEMENT; HOW MADE.-The indorsement must be written on the instrument itself or upon a paper attached thereto. The signature of the indorser without additional words is a sufficient indorsement.

32. INDORSEMENT MUST BE OF ENTIRE INSTRUMENT.-The indorsement must be an indorsement of the entire instrument. An indorsement which purports to transfer to the indorsee a part only of the amount payable, or which purports to transfer the instrument to two or more indorsees severally does not operate as a negotiation of the instrument. But where the instrument has been paid in part it may be indorsed as to the residue.

$33. KINDS OF INDORSEMENT.-An indorsement may be either special or in blank, and it may also be either restrictive or qualified or conditional. 34. SPECIAL INDORSEMENT; INDORSEMENT IN BLANK.-A special indorsement specifies the person to whom or to whose order the instrument is to be payable, and the indorsement of such indorsee is necessary to the further negotiation of the instrument. An indorsement in blank specifies no indorsee, and an instrument so indorsed is payable to bearer and may be negotiated by delivery.

$35. BLANK INDORSEMENT; HOW CHANGED TO SPECIAL INDORSEMENT.— The holder may convert a blank indorsement into a special indorsement by writing over the signature of the indorser in blank any contract consistent with the character of the indorsement.

36. WHEN INDORSEMENT RESTRICTIVE. --An indorsement is restrictive which either

1. Prohibits the further negotiation of the instrument; or

2. Constitutes the indorsee the agent of the indorser; or

3. Vests the title in the indorsee in trust for or to the use of some other person.

But the mere absence of words implying power to negotiate does not make an indorsement restrictive.

$37. EFFECT OF RESTRICTIVE INDORSEMENT; RIGHTS OF INDORSEE. —A restrictive indorsement confers upon the indorsee the right—

1. To receive payment of the instrument.

2. To bring any action thereon that the indorser could bring.

3. To transfer his rights as such indorsee where the form of the indorsement authorizes him to do so.

But all subsequent indorsees acquire only the title of the first indorsee under the restrictive indorsement.

$38. QUALIFIED INDORSEMENT.- A qualified indorsement constitutes the indorser a mere assignor of the title to the instrument. It may be made by adding to the indorser's signature the words "without recourse" or any words of similar import. Such an indorsement does not impair the negotiable character of the instrument.

$39. CONDITIONAL INDORSEMENT.-Where an indorsement is conditional a party required to pay the instrument may disregard the condition and make payment to the indorsee or his transferee whether the condition has been fulfilled or not. But any person to whom an instrument so indorsed is negotiated will hold the same or the proceeds thereof subject to the rights of the person indorsing conditionally.

§40. INDORSEMENT OF INSTRUMENT PAYABLE TO BEARER.—Where an instrument payable to bearer is indorsed specially it may nevertheless be further negotiated by delivery; but the person indorsing specially is liable as indorser to only such holders as make title through his indorsement.

$ 41. INDORSEMENT WHERE PAYABLE TO TWO OR MORE PERSONS.-Where an instrument is payable to the order of two or more payees or indorsees who are not partners all must indorse unless the one indorsing has authority to indorse for the others.

$42. EFFECT OF INSTRUMENT DRAWN OR INDORSED TO A PERSON AS CASHIER.—Where an instrument is drawn or indorsed to a person as "cashier" or other fiscal officer of a bank or corporation it is deemed prima facie to be payable to the bank or corporation of which he is such officer, and may be negotiated by either the indorsement of the bank or corporation or the indorsement of the officer.

§ 43. INDORSEMENT WHERE NAME IS MISSPELLED, &C.-Where the name of a payee or indorsee is wrongly designated or misspelled he may indorse the instrument as therein described, adding, if he think fit, his proper signature.

$44. INDORSEMENT IN REPRESENTATIVE CAPACITY.-Where any person is under obligation to indorse in a representative capacity he may indorse in such terms as to negative personal liability.

$45. TIME OF INDORSEMENT; PRESUMPTION.-Except where an indorsement bears date after the maturity of the instrument every negotiation is deemed prima facie to have been effected before the instrument was overdue.

$46. PLACE OF INDORSEMENT; PRESUMPTION.-Except where the contrary appears every indorsement is presumed prima facie to have been made at the place where the instrument is dated.

$47. CONTINUATION OF NEGOTIABLE CHARACTER.—An instrument negotiable in its origin continues to be negotiable until it has been restrictively indorsed or discharged by payment or otherwise.

$48. STRIKING OUT INDORSEMENT.-The holder may at any time strike out any indorsement which is not necessary to his title. The indorser whose indorsement is struck out and all indorsers subsequent to him are thereby relieved from liabilty on the instrument.

$49. TRANSFER WITHOUT INDORSEMENT; EFFECT OF.-Where the holder of an instrument payable to his order transfers it for value without indorsing it the transfer vests in the transferee such title as the transferrer had therein, and the transferee acquires in addition the right to have the indorsement of the transferrer. But for the purpose of determining whether the transferee is a holder in due course the negotiation takes effect as of the time when the indorsement is actually made.

§ 50. WHEN PRIOR PARTY MAY NEGOTIATE INSTRUMENT.-Where an instrument is negotiated back to a prior party such party may, subject to the provisions of this act, reissue and further negotiate the same. But he is not entitled to enforce payment thereof against any intervening party to whom he was personally liable.

ARTICLE IV.

RIGHTS OF THE HOLDER.

$51. RIGHT OF HOLDER TO SUE; PAYMENT.-The holder of a negotiable instrument may sue thereon in his own name and payment to him in due course discharges the instrument.

§ 52. WHAT CONSTITUTES A HOLDER IN DUE COURSE.-A holder in due course is a holder who has taken the instrument under following conditions: 1. That it is complete and regular upon its face,

2. That he became the holder of it before it was overdue and without notice that it had been previously dishonored, if such was the fact. 3. That he took it in good faith and for value.

4. That at the time it was negotiated to him he had no notice of any infirmity in the instrument or defect in the title of the person negotiating it.

$53. WHEN PERSON NOT DEEMED HOLDER IN DUE COURSE.-Where an instrument payable on demand is negotiated an unreasonable length of time after its issue the holder is not deemed a holder in due course.

54. NOTICE BEFORE FULL AMOUNT PAID.—Where the transferee receives notice of any infirmity in the instrument or defect in the title of the person negotiating the same before he has paid the full amount agreed to be paid therefor he will be deemed a holder in due course only to the extent of the amount theretofore paid by him.

$55. WHEN TITLE DEFECTIVE.-The title of a person who negotiates an instrument is defective within the meaning of this act when he obtained the instrument or any signature thereto by fraud, duress, or force and fear or other unlawful means, or for an illegal consideration or when he negotiates it in breach of faith or under such circumstances as amount to a fraud. § 56. WHAT CONSTITUTES NOTICE OF DEFECT.—To constitute notice of an infirmity in the instrument or defect in the title of the person negotiating the same the person to whom it is negotiated must have had actual knowledge of the infirmity or defect or knowledge of such facts that his action in taking the instrument amounted to bad faith.

$57. RIGHTS Of holder in dUE COURSE.-A holder in due course holds the instrument free from any defect of title of prior parties and free from defences available to prior parties among themselves, and may enforce payment of the instrument for the full amount thereof against all parties liable thereon.

§ 58. WHEN SUBJECT TO ORIGINAL DEFENCES.—In the hands of any holder other than a holder in due course a negotiable instrument is subject to the same defences as if it were non-negotiable. But a holder who derives his title through a holder in due course and who is not himself a party to any fraud or illegality affecting the instrument has all the rights of such former holder in respect of all parties prior to the latter.

$59. WHO DEEMED HOLDER IN DUE COURSE.-Every holder is deemed prima facie to be a holder in due course, but when it is shown that the title of any person who has negotiated the instrument was defective the burden is on the holder to prove that he or some person under whom he claims acquired the title as a holder in due course. But the last mentioned rule does not apply in favor of a party who became bound on the instrument prior to the acquisition of such defective title.

ARTICLE V.

LIABILITIES OF PARTIES.

$60. LIABILITY OF MAKER.-The maker of a negotiable instrument by making it engages that he will pay it according to its tenor and admits the existence of the payee and his then capacity to endorse.

§ 61. LIABILITY OF DRAWER.-The drawer by drawing the instrument admits the existence of the payee and his then capacity to indorse, and engages that on due presentment the instrument will be accepted or paid or both, according to its tenor, and that if it be dishonored and the neces

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